Académique Documents
Professionnel Documents
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A Feasibility Study
Service Promotion
Cost Structure
Evaluation of Policies
Service Promotion
Cost Structure
Evaluation of Policies
Market Trends
PROJECTED SUBSCRIBER POPULATION
50 0 40 5 40 0
49 6 3 94 3 94 30 5 30 5
A P (R /m n R U s o th)
30 5 30 0 20 5 20 0 10 5 10 0 5 0 0
Service Promotion
Cost Structure
Evaluation of Policies
Existing Market Competition Stake in Existing Market : BHARTI (10%) Technology relied upon : GSM (Larger service range in India) Total Investment : 1.5 billion USD Analyzing the predicted Market Revenue Trends, expected Break Even Period for Vodafone February 2008 Our Target Break Even before
Vodafone Break Even
Service Promotion
Cost Structure
Evaluation of Policies
Business Base Current Position of Reliance in market - 20.3 % of the subscriber population - Largest CDMA provider in India Collaboration with Reliance! Customer Base
Population Count in 2006(millions)
4% 9% 20% 7% 10% 0-4 5to14 15-19 20-24 25-34 35-44 11% 16% 10% 55-59 60&above 45-54
13%
- 54% of the population is below the age of 241 - Estimated youths annual spending US$10.5 billion1
Service Promotion
Cost Structure
Evaluation of Policies
Technology Requirements
Increased talk time Superior Power Control Lowest radiation level Hi-Speed Internet Access
India has less than 0.4% penetration CDMA1x handsets (140 kbps)
Better Voice & Consistent Quality Advanced platform supporting innovative applications GSM 3G evolution relies on CDMA Hence CDMA choice for the 3rd generation!
Service Promotion
Cost Structure
Evaluation of Policies
Cost Structure
Total Reliance Revenue = Young Reliance Reliance Subscriber Normal Revenue +Avg Packet Estd. 3G Revenue Customers Accessing Internet Consumption Packet wise perCharge (C) month (APC)
Billing
Cost Structure
Total Reliance Young Reliance Revenue = Estd. Subscriber RelianceAvg Packet Customers Normal Revenue + 3GInternet Accessing Revenue Consumption
D ec 07
F eb 06
50p for Following Reliance Customer Target 54%1 Billing 5 Japans estimate Young Customer Base 20.3% of each 128 Structure = D e c 7= 7.82 APC=8192(1MB) 38.54.22 0million Mn Mn Bytes 6packet A R P U ( t ) v p o p ( t ) .d t C v A P C v 0 . 3 6 v p o p ( t ) .d t
F eb 06
COMPUTATION STEPS
billion INR
Service Promotion
Cost Structure
Evaluation of Policies
Service Promotion
Utilities as per demand
Communication Entertainment Information Services Agro-business Optional Commercial Services
Attractive Rate
Handset Cost
Service Promotion
Cost Structure
Evaluation of Policies
Evaluation of Policies
Largest CDMA Reliance Provider Wider Estd. Adaptive to Profit margin Market Forces
Survival of Competition
Early Start
Defeat Vodafone Target Break Lucrative Offers Even Dec07 after Dec07
Service Promotion
Market Trends
Cost Structure
Thank You!
Technology Requirements
Evaluation of Policies
Business Base
References
1. Statistical Outline of India 2002-03 2. http://www.indiadaily.com/editorial/5826.asp,Dec 7, 2005 Media Release 3. http://www.stylusinc.com/internet_potential_india.htm 4. http://www.hardwaresecrets.com/article/151 5. http://ojr.org/japan/wireless/1084495929.php 6. http://www.indiadaily.com/editorial/5826.asp,Dec 7, 2005 Media Release 7. http://shopping.yahoo.com.au/ 8. http://www.umtsworld.com/umts/faq.htm#f3 9. http://blogs.zdnet.com/ITFacts/?p=9065 10. http://www.w2forum.com/item/us_wireless_market_reach_neartotal _saturation_2009 11. http://www.mouthshut.com/review/GSM_Mobile_Technology_Vs_ CDMA_Mobile_Technology-34613-1.html 13. http://www.businessworldindia.com/sep2004/news08.asp 14. http://www.umtsworld.com/umts/faq.htm#f36 15. www.auspi.org/presentation/AUSPI-press-conference.ppt
Backup Slides
World-Market Share
178-570
others 27%
NOKIA 34% siemens 8% Sony Motorola Ericsson 5%Samsung 15% 215-420 $990 190-279 11%
= 19,448 INR
Back
Current Internet User Count=38.5million2 Reliance Subscriber Count=20.3%of 38.5=7.82million Targeted Youth Population=54%of 7.82=4.22million Customer Base for Reliance=11.65million(data provided)
Ratio for Target Customer for 3G= 4.22/11.65 = 0.36 Considering this ratio remaining constant, Revenue earned within the breakeven period limits:: Revenue earned by telephony Revenue earned by internet usage
120000 110000 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0
Ju n05 Au g05 Ju n06 Au g06 Ju n07 Au g07 5 6 O ct -0 6 De c06 Fe b07 Ap r07 O ct -0 7 De c07 ec -0 5 5 b0 ct -0 b0 rFe Ap Fe Ap O D r06 05
75572
38951.5
20574.68 22572.26
215.92
Total Revenue = 7044.26 billion Total Reliance Revenue = 20.3% of 7044.26 = 1429.99 billion If acquired a 10% stake, Returns to the company = 10% of 1429.99 143 billion >> 115 billion (investment cost)
Back
D ec 07
( t ) v pop ( t ).dt
v 0.36 v
pop ( t ).dt
eb 06
Based on the Plot Returns(t) = Area Under the Plot = 10667.93 +89.71 t2 +833.56 t (billions) Returns till Breakeven period = 1.5 billion USD = 63000 million INR*
1600 1400 1200 1000 800 600 481.9 400 200 0 440.3 483.04 833.5
De c-0 Ma 4 r-0 5 Ju n-0 5 Se p0 De 5 c-0 5 Ma r-0 6 Ju n-0 Se 6 p06 De c-0 Ma 6 r-0 7 Ju n-0 7
12/1/04 3/1/05 6/1/05 6/1/06 6/1/07
44 34 25 14 5 64 39
No. of networks.
84 79
3.5 2 1.5
6.5 6 2.8
1 4 2 0 Teledensity(percentage) Teledensity(%)
71
Tariff(Rs/min)
CDMA GSM
4.6
0.5
Tariff(Rs/min)
35 33 30 25
ARPU (US$)
32
239
20 15 10 5 0
Trends in population
156.6
150 100 50 0
2010
54% of the population is below the age of 24 Estimated youths annual spending US$10.5bn with growth rate of 12%1 55% of young India opts for career in web related activities3 Demand for internet access (38.5 Mn currently) may shoot up to 100 Mn in 2 years.